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SDI — Credit for excess SDI/VDPI withholding (refundable)

California wages are subject to SDI (State Disability Insurance) or VDPI (Voluntary Plan Disability Insurance) withholding up to a specific annual amount. If the employer withholds more than this amount, the taxpayer needs to contact the employer for reimbursement from the employer for the excess. You report SDI/VP withholding on Form W-2.
If a taxpayer has 2 or more employers, and the combined withholding exceeds the annual capped amount, the taxpayer may claim a credit on Form 540/540NR for the excess withholding.
The application calculates the Excess SDI/VPDI Withholding Worksheet separately for the taxpayer and spouse using data you've entered at the federal level in the
W-2
 input screens. The calculation limits line 1 of the worksheet, Total SDI/VPDI withheld, to the amount that was correctly withheld on each W-2 per state instruction. To calculate the correct withheld amount, the wages subject to SDI/VPDI withholding is multiplied by the current-year percentage for each W-2. The lesser of that amount, or the amount actually withheld, is included on line 1 of the worksheet.
Refer to the California Excess SDI/VPDI Withholding Worksheet for details of the calculation for each W-2.

Wages subject to SDI/VPDI withholding (required)

State wages in W-2 Box 16 plus retirement contributions in Box 12, fewer SUB payments in Box 14 are used by default.
For part-year and nonresident returns, amounts in Boxes 12 and 14 are included in the calculation only when the ZIP Code in the sections is
CA
. To force an amount of SDI/VPDI-subject wages that's different than the calculated amount, enter the amount in
Local Wages
, Box 18.

SDI withholding

You can enter SDI withholdings in 2 places:
  1. Box 19,
    Local W/H
    : Select
    SCI
     or
    VP
     from the
    Box 20
     dropdown list. The application will enter
    State Dis
     or
    Voluntary
     in the
    Name of locality
    .
  2. Amount withheld in Box 14,
    Other
     with code
    5
    , State Disability Insurance withholding, with ZIP Code
    CA
    .
The amount by which line 1 exceeds the current-year SDI/VPDI limit equals the excess SDI withholdings you can claim on the return.
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